Heading for the Hills: Travelling in Iceland on a Budget

“I heard them calling in the distance
So I packed my things and ran
Far away from all the trouble
I had caused with my two hands

Alone we travelled armed with nothing but a shadow
We fled, far away…”

Of Monsters and Men (Mountain Sound)

Iceland has been on my bucket list for quite some time and I recently visited  ‘The Land of Fire and Ice’  with my friend Caro. It did not disappoint. As a nature lover and hiking enthusiast everything is  in a incredibly pristine state and while there is a growing tourism industry, you don’t get the masses when you head out just of the beaten track.

The catch with Iceland is that it isn’t the cheapest destination to travel to. Everything is expensive. And for someone like me who was visiting the country at the start of a European trip, I wanted to make sure that I wasn’t spending too much. Here are my top tips (of course, some are learning from my own mistakes)


Travelling is always a bit cheaper when you can share the costs with others. Transportation can be quite expensive in Iceland so generally if there are two or more of you, a hire car is often the cheaper option. You can also check out noticeboards at camping grounds and hostels where people post car pooling to different places at a smaller cost.  That being said, we had chosen to take buses to avoid back-tracking after some one way hikes. This also allowed us to sit back, relax and have a nap if we needed. Iceland is also a hub for many who cycle and is also one of the safest places to hitch hike, so if you are not on a tight schedule, this way of travelling is often given the ‘thumbs up.’

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Cyclotourism is big in Iceland: but be prepared for all kinds of weather!
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Buses give you a break and can be a cheaper if travelling solo.


One of the main reasons that people visit Iceland is because of it’s immense natural beauty. It is teaming with volcanoes, waterfalls, geysers, hiking paths, black beaches, glaciers, mountains and hot springs. The good thing is, that you can experience a lot of these things for free. My top picks are to head to the Golden Circle (which includes Gullfoss, Þingvellir and Geysir) and consider taking a soak in the free Reykjadalur hot river (note it is about a 1 hour walk to get there from the car park) over the expensive and crowded Blue Lagoon.

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Check out the incredible natural phenomenon of steaming water (a geyser) at Geysir.
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Meaning ‘Golden Falls’, Gulfoss is an absolutely breathtaking place to visit.
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Walk around and experience Þingvellir, the location of Iceland’s first parliament and where the Eurasian and North American tectonic plates are being pulled apart at about 5cm a year.
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Reykjadalur hot river

Camping is also the cheapest form of accommodation in which you can do in many designated campsites around the country (check out the following websites: tjalda.isen.camping.info/iceland/campsites, and campingcard.is). Technically you can also camp for free in Iceland. The Environment Agency of Iceland states:

“Camping with no more than three tents is allowed on uncultivated ground for a single night, unless the landowner has posted a notice to the contrary. However, campers should always use designated campsites where they do exist. Do not camp close to farms without permission. If a group of more than three tents is involved, these campers must seek permission from the landowner before setting up camp outside marked campsite areas.”

Some of the main hikes such as the Laugavegur Trek have the option of hut or camping accommodation. The huts are booked out months in advance (unless you’re lucky on the day and there are spots available- but be prepared to pay a premium!). We were able to camp for free on the Circle Route (around Kerlingarfjoll) because it was the start of the hiking season.

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Camping for free on the Circle Route.
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Camping and Hut accommodation on the Laugavegur Trek


While not necessarily helping the Iceland economy, to save some dollars (and some weight while we were hiking) and to maintain our nutritional requirements with our high level of physical activity, Caro and I brought the majority of our hiking food and snacks. The great thing about Iceland is that it is safe to drink water from natural streams (just avoid areas near wildlife and choose fast flowing water). We were able to just boil some water and add to our dehydrated meals.

That’s not to say we didn’t enjoy some food in Iceland such as Skyr (my favourite) and salted licorice.

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Cooking oats, dried fruit with milk powder for breakfast.
Skyr in the drink form: Delicious and nutritious
Skyr in the drink form: Delicious and nutritious


Souvenirs can be pretty expensive when you’re in Iceland (and in general) so I personally like to bring back food items for people when I am away- especially since sometimes you can just get them from a supermarket. Another way to get nab that great souvenir is to head to a charity store (such as the Red Cross or Salvation Army) or a flea market such as Kolaportið market (which also sells food) to try to find that little piece of Iceland to take home.

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Look like a local with a secondhand lopapeysur


As with everything, alcohol is also expensive in Iceland. Expect to pay around $12 AUD or a pint of local beer and even more for wine. If you need to whet your palate, choose beer, head to the Happy Hours (where beer can be around $6 AUD) and check out this page for the best Happy Hours around Reykjavik.


Cheers to that!

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